Fogelhund
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Series Talk: Tax implications
- Thread starter mydnyte
- Start date
So do it the opposite way. No tax states spend to the cap and teams in higher tax environments get to spend more. Why wouldn’t the NHLPA support that? More likely it would be the US team owners who would vote against it.
Four out of the last five cup champs were from the lowest tax states. And on top of that how many times have Dallas and Vegas been to the Conference finals in those five years? Three times each. You’re picking the outliers and Seattle is an expansion team where it rains all the time.
Menzinger
Kessel4LadyByng
The tax issue IS a problem,.the challenge is finding a practical solution. Imo the easiest way is to simply raise the ceiling on what team's can pay players, which gives teams in less desirable locations at least the chance to win over guys if they're willing to pay more
I think you'd be surprised at how little some of those actually pay, relatively speaking. It's easy money, but it's covering car payments not getting guys a new house
Community
44 is Rielly good
Highest-Paid Hockey Players in 2025 | Brand Vision
Discover the Highest Paid Hockey Players 2025, from record contracts to growing endorsements. See who leads this list of Best Paid Hockey Stars 2025.
www.brandvm.com
Endorsements have significantly increases in the last few years and still "only" reach 6m/yr (~50% of his NHL salary) for the highest earner (McDavid). That's also combined for his 6 different endorsement deals.
This link doesnt include Crosby as his base salary is lower now, but in the past he was listed as 3-4.5m/yr. That leaves (I believe) 5 guys making more than 2m/yr and ~10 guys making >1m in cumulative endorsements so its really not nearly as big as you think it is. The top guys are also getting this $ from 4-6 different organizations.
To add some more info, 10 years ago, there was only 4 guys making more than 1m/yr in endorsements and 13 NHLers making 150k+ per year. (Top 12 NHL Endorsers - Opendorse)
I think we'll just have to live with the tax difference, but I just wanted to point out that endorsements don't make up the difference and, in fact, before McDavid and Matthews were signed by Canadian teams the highest endorsement deals were from American team's players (Crosby, Ovechkin, Stamkos, Toews, etc.). While the market may be more Canadian focused, it doesn't need to be a Canadian team player as its just about recognizing the player and the majority of Canadians know who Ovechkin and Crosby are despite being on American teams. McDavid and Matthews endorsement totals wouldnt change significantly if either went to the US. Local deals are usually much smaller than global/national deals too.
ULF_55
Moderator
Yeah, always cute seeing Player X, doing a commercial for a dealership, not the Car Company.
Players in no state income tax locations would use tax accountants for games played in taxable states and provinces, but their starting point is already an advantage.
Bettman won't address it, he needs to be removed immediately. Very obvious players of significance will accept 10-20% less in low state income tax locations.
WillNy29
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not if the CRA deems him a Canadian resident via primary or secondary factors. Also Jock tax on bonuses, taxation treaties for 42 games played outside of Toronto etc.
the tax discrepancy isnt this big
WillNy29
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WillNy29
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Texas has higher than average property taxes to make up for the shortfall in collecting state tax revenue
WillNy29
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and we fund programs with what money? do we privatize them an ensure the lower class amongst us just dies?
And lower than average property value...
The difference in property tax is like $10,000 on a one million dollar home.
I'm sure Toronto makes up for it in other ways.
WillNy29
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the tax implications are very overblown. the place where taxes impact contracts is the lower end of the roster not the big boys.
Between US/CAN players theres a 15% rule on signing bonuses to ensure that American players in Canada and Canadian players in America have to pay 15% on signing bonuses.
The other thing to consider is that the CRA uses sojourning rules as well as residency rules for taxation. They can easily deem someone living in Texas as a Canadian resident because they have a bank account and a car in canada or they're putting money in their Canadian parents bank account and then you have to pay taxes to canada and wait for the International Tax Credit to kick in.
the leafs have the resources to pay players everything upfront as signing bonuses which allows players to earn more money using the simple concept of Time Value of Money. $54m in signing bonuses today and 1 million over the rest of the 5 year contract is worth copious amounts more than 11m per year in salary.
Factor in the RCA tax deferral which is like a superpower RRSP for rich people and these guys aren't really paying their fair share.
Auston Matthews Shoots and Scores Tax Savings | Crowe Soberman LLP
On February 5, Auston Matthews signed a 5-year contract extension with the Leafs for $58.15M. Fans have reason to be thrilled today, but Canadian taxpayers may be a bit irritated.
the tax implications are very overblown. the place where taxes impact contracts is the lower end of the roster not the big boys.
Between US/CAN players theres a 15% rule on signing bonuses to ensure that American players in Canada and Canadian players in America have to pay 15% on signing bonuses.
The other thing to consider is that the CRA uses sojourning rules as well as residency rules for taxation. They can easily deem someone living in Texas as a Canadian resident because they have a bank account and a car in canada or they're putting money in their Canadian parents bank account and then you have to pay taxes to canada and wait for the International Tax Credit to kick in.
the leafs have the resources to pay players everything upfront as signing bonuses which allows players to earn more money using the simple concept of Time Value of Money. $54m in signing bonuses today and 1 million over the rest of the 5 year contract is worth copious amounts more than 11m per year in salary.
Factor in the RCA tax deferral which is like a superpower RRSP for rich people and these guys aren't really paying their fair share.
Auston Matthews Shoots and Scores Tax Savings | Crowe Soberman LLP
On February 5, Auston Matthews signed a 5-year contract extension with the Leafs for $58.15M. Fans have reason to be thrilled today, but Canadian taxpayers may be a bit irritated.www.crowe.com
Didn't a bunch of owners just complain about the tax impact?
I know some GMs and agents are on record stating it is a consideration for players.
Seems like it is an issue... don't have a solution (there are more issues than just this), but it seems like it is an issue for teams.
WillNy29
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like I said its the lower end guys and then some of the euro guys there are less than ideal treaties with.
Guys like Matthews it's not an issue for. The Owners complain because they have to pay the lower end guys more or have to pay signing bonuses upfront which is just as much a hit to the owners as it is a gain to the player (but f*** the owners tbh).
states like Florida make it easier to tax plan obviously but the end result is that its pennies on the dollar difference after a good tax accountant is involved. I've worked on this stuff when I was on the tax side of things (as interesting as it is my brain wanted to be in financial reporting instead lol). The Agents commission tax is different than the players and so the agents are incentivized to brainwash the players a little to complain. Allan Walsh did a pretty good segment on taxes and Bryan Burke had a presentation at UFT that taught accountants and lawyers how to essentially make taxes minimal for athletes (I watched it for CPDs lol).
WillNy29
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Zonk
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I am not suggesting that at all. Please read my post. It asks the questions why it bothers us that there are tax inequities in pro sports.
WillNy29
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The tax discrepancy is a problem. People like to bring up endorsement deals and bonus money and so on for canadians teams but that doesnt seem to have much merit as base salaries are used as the main comparable during negotiations and there seems to be quite a bit of evidence that salaries for players on higher tax teams are on average higher than players on low tax teams despite all these bonuses and endorsements.
The solution is simple IMO which is to move to a soft salary cap like many other sports do. This will provide a slight competitive advantage to markets that generate higher revenues and can support paying the added penalties by going over the salary cap while still maintaining some degree of parity which the league values. There is no other way to offset out tax differences as you go down a rabit hole of trying to offset all living expense differences across each city which is near impossible.
The solution is simple IMO which is to move to a soft salary cap like many other sports do. This will provide a slight competitive advantage to markets that generate higher revenues and can support paying the added penalties by going over the salary cap while still maintaining some degree of parity which the league values. There is no other way to offset out tax differences as you go down a rabit hole of trying to offset all living expense differences across each city which is near impossible.
thewave
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That sounds like the master plan anyways. You can't force everyone into one way of life because some people / govs / corps / companies are poorly run and can't make it work. So what do you do? Make everyone do the same thing? Life becomes uninteresting and people will become depressed and find no meaning then who knows what.
Equalisation of Sports taxes at the NHL level is a worthy idea. They provide entertainment and positive national morale. We need to keep Canada competitive and taxing people into oblivion isn't the way.
Like sorry, that little art shop \ museum thing getting money and sees 20 customer a month is not a good use of money and there are tens of thousands of wasteful programs like this.
Canada is poorly run, as are the Leafs.
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thewave
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No it's not. Cut the stupid programs. Canada is one of the worst run countries in the G20. Terribly run, so far so you can read the RCMP report in the National Post that basically says they expect us to have a financial crisis so bad int he next few years and need a plan to deal with us.
@Maple Leaf
Secret RCMP report warns Canadians may revolt once they realize how broke they are
The RCMP report authors warn that whatever Canada’s current situation, it "will probably deteriorate further in the next five years."
nationalpost.com
You should tell the owners that just complained about this.
Or the players/GMs mentioning it.
Let them know it is not a big issue because they seem to care.
No offense to you, but I am going to assume they have a better grasp on free agency and taxes than you.
The tax rate on a signing bonus is not 15%. The bonus is taxed where the player is a resident. The 15% is the amount that the tax treaty allows the other country to withhold. So for Matthews- CRA gets 15% and the IRS gets to tax it at Arizona rates, then he gets a tax credit for the amount paid to Canada.
For Marner’s last contract, he would have paid tax at his marginal Canadian tax rate for all of the bonus.
